Stock exchange release

Fortum Financial Statements Bulletin 2018: Improved 2018 results on higher market prices – New phase in strategy implementation started

01 February 2019, 9:00 EET



This release is a summary of Fortum’s Financial Statements Bulletin 2018. The complete report is attached to this release and It is also available on the company's website at

October-December 2018

  • Comparable EBITDA was EUR 473 (424) million, +12%
  • Comparable operating profit was EUR 333 (295) million, +13%
  • Operating profit was EUR 309 (315) million, -2%
  • Earnings per share were EUR 0.22 (0.28), of which EUR -0.02 (0.01) related to items affecting comparability
  • Cash flow from operating activities totalled EUR 38 (295) million, the decline was mainly due to the change in working capital from settlement of futures

January-December 2018

  • Comparable EBITDA was EUR 1,523 (1,275) million, +19%, including EUR 26 million profit from selling a 54% share of Fortum's Indian solar power plants
  • Comparable operating profit was EUR 987 (811) million, +22%, including EUR 26 million Indian solar profit
  • Operating profit was EUR 1,138 (1,158) million, -2% 
  • Earnings per share were EUR 0.95 (0.98), of which EUR 0.15 (0.38) related to items affecting comparability, including capital gains of EUR 0.09 from the sale of the 10% stake in Hafslund Produksjon. In 2017, the sales gain from the Hafslund transaction was EUR 0.36 and the impact from a Swedish income tax case was EUR -0.14
  • Cash flow from operating activities totalled EUR 804 (993) million
  • In June, Fortum closed the Uniper offer and became the company's largest shareholder 
  • In November, Fortum updated its strategy and reconfirmed the financial targets and dividend policy
  •  Fortum's Board of Directors proposes a dividend of EUR 1.10 (1.10) per share

Summary of outlook

  • The Generation segment's Nordic generation hedges: approximately 75% hedged at EUR 31 per MWh for 2019, and approximately 45% at EUR 29 per MWh for 2020
  • Capital expenditure, including maintenance but excluding acquisitions, expected to be in the range of EUR 600-650 million in 2019. In 2020, capital expenditure is expected to decline

Key financial ratios

2018 2017
Return on capital employed, % 6.7 7.1
Comparable net debt/EBITDA 3.6 0.8

Key figures

EUR million or as indicated IV/18 IV/17 2018 2017
Sales 1,599 1,432 5,242 4,520
Comparable EBITDA 473 424 1,523 1,275
Comparable operating profit 333 295 987 811
Operating profit 309 315 1,138 1,158
Share of profits of associates and
  joint ventures
-44 34 38 148
Profit before income taxes 261 300 1,040 1,111
Earnings per share, EUR 0.22 0.28 0.95 0.98
Net cash from operating activities 38 295 804 993
Shareholders’ equity per share, EUR 13.33 14.69
Interest-bearing net debt (at the end of the period) 5,509 988

Fortum's President and CEO Pekka Lundmark:

"2018 was an eventful year for Fortum. We continued our strategy implementation with the integration and development of our Hafslund and Ekokem acquisitions, further investments in renewables, and most significantly; closing the Uniper tender offer. Our long-term belief in the need for large-scale decarbonisation took a leap forward with the decision to strengthen the Market Stability Reserve and subsequent tripling of emission allowance prices, having a clear positive impact on power prices.

Over the previous years we have worked hard to deliver on our strategy announced in early 2016. As a result, we now have a portfolio of businesses with good profit potential for coming years. After taking significant steps in the capital redeployment that we began in 2016, we updated Fortum's strategy in November 2018. The updated strategy is a natural continuation of the previous one and builds on four priorities.

Our first strategic priority is to pursue operational excellence and increased flexibility in order to ensure benchmark performance of our existing businesses and improve our long-term competitiveness. After the large investments done during previous years it is only natural that the second priority is to ensure value creation from these investments. We will also continue to optimise our business portfolio, considering the ongoing transformation and decarbonisation of the sector. Despite the significant capital redeployment already made, we will, as our third priority, continue to drive focused growth in the power value chain. We will build on our long-standing expertise with the strategic focus on CO2-free power generation – For a cleaner world. Foreseeing the market development towards the end of the 2020s will be increasingly challenging, but we believe that the uncertainty will also provide new business opportunities. Consequently, as our fourth priority, we aim to build on our existing competences and emerging technologies to create new businesses, independent of power prices, that have the potential for sizeable profit contribution. One example of initiatives in this area is our commitment to invest in Valo Ventures, a new global venture capital fund. Valo Ventures invests in digital start-ups focusing on key global megatrends that are central to Fortum's strategy. Fortum launched Valo Ventures together with Scott Tierney, former Google Capital co-founder.

The urgent need to decarbonise society is perhaps the greatest challenge of our time. The EU Commission published its long-term climate vision in November. Fortum supports the net zero emission target for 2050, as proposed in the most ambitious scenario. Cost-efficient emission reduction pathways should be established for all sectors. The EU emission trading scheme currently covers less than half of EU CO2 emissions. Therefore, strengthening and broadening the scope of the EU ETS to e.g. heating, cooling, and transport should be a key tool to drive decarbonisation.

Our continued investments in wind and solar are starting to have a positive impact on our results. Commissioned in the beginning of 2018 and the first of its kind in Russia, the 35-MW Ulyanovsk wind park is one example of this. The sale of a 54% stake in our 185-MW solar power plants in India freed up capital for further investments, and in June Fortum won a 250-MW auction for an Indian solar park with a fixed tariff for 25 years. Our total wind and solar portfolio has grown substantially during 2018. Together with our associated companies, we have a portfolio of close to three gigawatts of solar and wind parks and development projects in the Nordics, Russia, and India.

Closing the offer on Uniper shares in June 2018 was the most significant milestone during the year. We have a clear vision for how Fortum and Uniper can jointly build 'The Utility of the Future', and we want to work with the company to explore how to best make this vision a reality for the benefit of all shareholders and stakeholders of both companies. To our disappointment, talks with Uniper have not yet proceeded as anticipated, but the fundamentals of our investment case are intact and we remain committed. Since the closing of the offer, we have increased our shareholding in Uniper in order to further secure Fortum’s voting position in any future Uniper General Meeting. At the end of 2018, Fortum held 49.99% of Uniper shares and voting rights.

Fortum’s fourth quarter results improved, mainly as a result of higher power prices and increased nuclear production, due to improved availability. The results were still burdened by lower than average hydropower generation volumes, due to low inflows and reservoir levels, although the situation improved from the record low volumes seen in the third quarter. The impact of the higher power prices is reflected in our full-year comparable operating profit, which increased by 22%. The investment in Uniper only had a marginal effect on Fortum's 2018 results, as they include only Fortum's share of Uniper's third-quarter results. In the future, Uniper's profit and dividends will contribute to Fortum's earnings per share and cash flow.

Highlight of the year for the Generation division was the clearly improved results, driven by higher market prices. During the year we also finalised the automation modernisation project at the Loviisa nuclear power plant, the biggest single project since the construction of the plant. Following strong improvement in Russia over the past years, the 2018 results in roubles improved slightly. In the City Solutions and Consumer Solutions divisions, 2018 was characterised by the integration of Hafslund, which proceeded well. Unfortunately, the financial results for these two divisions have not yet reached satisfactory levels. We will continue the integration work, and expect the synergies to materialise gradually during 2019 and 2020.

Based on the results of 2018 and the outlook for future years, Fortum's Board of Directors is proposing an unchanged dividend of EUR 1.10 per share for the calendar year 2018.

Finally, I would like to thank all our employees for their commitment and hard work during the year and our customers and all other stakeholders for their continued trust in us."

News conference/webcast

The joint news conference for media, investors, and analysts will be held on 1 February 2019 at 11.00 EET at Fortum Head office in Keilalahdentie 2-4, Espoo.

The conference can be followed as a live webcast on Fortum's web site at To participate in the teleconference, please dial in approximately 5 minutes before the beginning of the event using the numbers below:

FI +358 9 8171 0310
UK +44 3333 000 804
US +1 631 9131 422

Passcode: 62957186#

The webcast will be recorded and published on Fortum's website at together with the transcript after the event.Further information:

Investor Relations and Financial Communications: Ingela Ulfves, tel. +358 40 515 1531, Måns Holmberg, tel. +358 44 518 1518, Rauno Tiihonen, tel. +358 10 453 6150, Pirjo Lifländer, tel. +358 40 643 3317, and investors [at] fortum [dot] com (investors[at]fortum[dot]com)

Media: Pauliina Vuosio, tel. +358 50 453 2383

Financial calendar in 2019

Fortum’s Financial Statements and Operating and Financial Review for 2018 will be published during week 8 at the latest.

Fortum will publish three interim reports in 2019:

  • January-March on 26 April 2019 at approximately 9:00 EEST
  • January-June on 19 July 2019 at approximately 9:00 EEST
  • January-September on 24 October 2019 at approximately 9:00 EEST


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Key media

More information, including detailed quarterly information, is available on Fortum’s website at